Asian shares slump on China wor­ries, oil falls


Asian shares slumped on Thurs­day, dragged lower by height­ened con­cerns about the health of China s econ­omy af­ter un­ex­pect­edly bear­ish min­utes from the US Fed­eral Re­serve.

The dol­lar tum­bled as the Fed damp­ened ex­pec­ta­tions for a rate rise in Septem­ber and out­lined its fears about the global econ­omy, send­ing oil prices to a fresh low.

Tokyo lost 0.47 per­cent as the yen strength­ened against the green­back, adding to wor­ries about Ja­pan s slow­ing ex­ports. Syd­ney fell 1.15 per­cent and Seoul dipped 0.74 per­cent. Shang­hai lost 1.18 per­cent in early trad­ing af­ter a volatile ses­sion the pre­vi­ous day, while Hong Kong con­tin­ued its down­ward trend, fall­ing 1.38 per­cent.

Deal­ers said mar­kets re­mained clouded by un­cer­tain­ties over China s econ­omy af­ter the shock de­val­u­a­tion of the yuan last week added to fears it is slow­ing more than thought. "While the Fed is look­ing less likely to move in Septem­ber, ev­ery­body is re­ally wor­ried that China is slow­ing down faster than what of­fi­cial fig­ures are telling you," Evan Lu­cas, at IG Mar­kets in Mel­bourne, told Bloomberg News.

"That s putting pres­sure on in­dus­trial met­als and emerg­ing mar­kets." The dol­lar lost more than one cent against the euro af­ter the Fed min­utes said that while con­di­tions for a rate in­crease were "ap­proach­ing" they had not yet ar­rived. In Tokyo, the dol­lar was quoted at 123.91 yen, from 123.89 yen in New York late Wed­nes­day. The euro rose to $1.1138 and 138.01 yen from $1.1121 and 137.78 yen.

Min­utes from the Fed, which met be­fore China s sur­prise de­val­u­a­tion of the yuan last week, also high­lighted con­cerns about the global econ­omy and par­tic­u­larly China, say­ing "a ma­te­rial slow­down in Chi­nese eco­nomic ac­tiv­ity could pose risks to the US eco­nomic out­look".

Fears about Asia s largest econ­omy, the world s top im­porter of energy prod­ucts, and data show­ing a rise in US petroleum in­ven­to­ries pushed oil to a fresh sixand-a-half year low in New York. Oil stocks rose 2.6 mil­lion bar­rels in the week end­ing Au­gust 14, ac­cord­ing to the US Depart­ment of Energy, which also showed a 300,000 bar­rel rise at the Cush­ing, Ok­la­homa trad­ing hub.

In Asia, crude ex­tended losses to trade a hair s breadth away from the psy­cho­log­i­cally im­por­tant $40 a bar­rel mark -- a level not seen since the height of the fi­nan­cial cri­sis in 2009. US bench­mark West Texas In­ter­me­di­ate for Septem­ber de­liv­ery was down 32 cents to $40.48 a bar­rel while Brent crude for Oc­to­ber fell 25 cents to $46.91. The drop weighed on energy com­pa­nies in Asia, with Petrochina among one the ma­jor losers in Shang­hai, drop­ping 2.26 per­cent, while CNOOC lost 1.28 per­cent.

"The Fed is lack­ing decisive rea­sons to raise rates," Mit­sushige Akino, an ex­ec­u­tive at Ichiyoshi As­set Man­age­ment, told Bloomberg News. "Con­cerns about the global econ­omy are a bur­den and cheaper oil in­creases con­cerns about global growth." Safe haven gold got a boost, trad­ing at $1,134.90 com­pared to $1,122.65 late Wed­nes­day.

Shares in Qan­tas rose 0.40 per­cent af­ter the Aus­tralian flag car­rier re­ported a Aus$557 mil­lion (US$409 mil­lion) an­nual net profit from a Aus$2.84 bil­lion loss a year ago, af­ter an ag­gres­sive cost-cut­ting pro­gramme.

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